England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/03/2010

Mr Justice Tugendhat :

1. There has arisen in this action a difference between the parties as to the meaning of an order made by HHJ McMullen QC ("the Judge") on 3 April 2009. On the Claimant's case the issue is solely as to the meaning of paragraph 5 of that order. On the Defendant's case the issue is also as to the meaning of CPR 36.14(3)(b).
2. The claim is one for damages for very severe personal injuries suffered by the Claimant in a road traffic accident caused by the negligence of the Defendant. The negligence of the Defendant was not in issue. But there was an issue as to the contributory negligence of the Claimant, because he was not wearing a seat belt. He accepted that the court should reduce the award by 25% to reflect his contributory negligence. For some time the Defendant contended that the award should be reduced by 50%. The difference between 75% and 50% is 25%, and 25% is one third of the 75% which the Claimant accepts as the proper proportion of his damage for which he should receive compensation. Accordingly, so long as the Defendant was contending for a reduction of 50%, the amount of the damages which was at risk, or was uncertain, was 33.3% of whatever sum might be agreed or awarded in respect of this claim.
3. As the Judge recorded in his judgment, the Claimant made an offer under CPR Part 36 to apportion responsibility for the damage at 25/75 in his favour. That offer was available for acceptance until 23 November 2007. On 17 December 2008 Master Leslie ordered that there be judgment for the Claimant, subject to issues of contributory negligence, and damages to be assessed. In due course the Defendant abandoned his contention, and by paragraph 1 of the order of 3 April 2009 the Judge ordered that the damages be assessed to the extent of 75% of the full value of the claim.
4. At the hearing counsel for the Claimant asked for orders under CPR 36.14(3). So far as material, CPR 36.14 reads as follows:

"(1) This rule applies where upon judgment being entered – ...

(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.

(3) …, where rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to –

(a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;

(b) his costs on the indemnity basis from the date on which the relevant period expired; and

(c) interest on those costs at a rate not exceeding 10% above base rate".

5. Counsel for the Defendant resisted that application on the basis that the proper order was for the application to be stayed.
6. By para 2 of his order, the Judge ordered the Defendant to pay the Claimant's costs of the claim on the standard basis to 22 November 2007 and on the indemnity basis for the period between 23 November 2007 and 3 April 2009.
7. At paragraph 4 of his order he ordered that interest be payable on costs incurred between 23 November 2007 and 3 April 2009 at 10% over base rate until payment. Those two orders were made pursuant to CPR 36.14(3)(b) and (c). No further issue arises before me in relation to those paragraphs of the order.
8. The issue arises out of paragraph 5 of the order which was made under to CPR 36.14(3)(a). That reads as follows:

"Interest shall be payable in due course on 33% of the damages ultimately determined to be payable by the Defendant to the Claimant at 10% over base rate from 23 November 2007 until 3 April 2009".

9. The Judge then made orders for the assessment of damages to proceed. The Defendant sought to appeal that order. In due course the appeal was compromised on the basis that the figure in paragraph 5 of the order would be 5% instead of 10%.
10. There were a number of points raised by the Defendant on the proposed appeal, but they did not include the point which is now at issue before me. One of the points that the Claimant makes before me is that the point now raised should have been raised, if at all, on an appeal and that it is too late to raise it now.
11. The reasons given by the Judge for the order he made in paragraph 5 are set out in paragraphs 11 to 15 of his judgment which read as follows:

"11. I then turn to interest payable on costs, again pursuant to rule 36.14(3), between 23 November and today at 10% over base rate. I have had inchoate arguments as to the applicability of 10% during the recession but it has been suggested to me that the rule makers in 2007 will have had an eye on base rte and on the special account rate. There has been no change in the rule notwithstanding the change in the special account rate.
12. It may seem surprising that these enhancements should continue to apply at that sort of rate during the recession but the rule makers have not changed the rule and I am not convinced that I should depart from it. It does not seem to me to be a case where just because there has been a change in the economic climate I should regard it as unjust to make a payment in accordance with the rule. This will apply until the date of payment, so it is in the Defendant's hands to put a stop to this enhancement by making payment.

13. I then turn to interest on damages. The first point to be made by counsel for the Defendant was that there has been no award. I reject that. Whatever figure is achieved as a result of further settlement or an award of the court it will be possible to fix an interest payment to it. The amount claimed is on 33.3% of the damages and it has been explained to me by Mr.Westcott that the thinking is that the Claimant was at risk of having his damages slashed down to 50% pursuant to arguments presented by insurers in Stanton v. Collinson [2009]EWHC 342, a judgment of Cox J, (and see Hitchin and Gowler). What he was at risk of was a difference between his offer of a 25% reduction and what was likely to be argued by the Defendant at trial, a reduction of 50% (albeit that percentage was rejected).

14. I know that in fact an offer was made, not accepted, that the Defendant would agree to a 35% reduction but that would not have been shown to the court and I imagine that the Defendant would have been arguing for 50%. So the correct figure, in my judgment, is to examine what the Claimant was at risk of losing and the figure of 33% is correct. I say no more about the figure of 10% than I said above, it will apply to this figure as well.

15. As to the date on which it ceases, there are policy reasons why no further order should be made after today. That is because there may be difficulties in achieving a settlement of this matter and with an enhancement rate of 10% running daily it seems to me that the Defendant is going to be at risk of unforeseen delays or other difficulties which are not attributable to his failure to accept the Part 36 offer and so that minute will be effective until today." .

12. A compromise has now been reached between the parties subject to the court being satisfied as to the continuity of the proposed periodical payments in accordance with the Damages Act 1996 s.2(3). I have already indicated that I am satisfied that the continuity of payment under the order would be reasonably secure as required by that section.
13. In summary the agreement is that there be judgment for:

i. damages in a lump sum of £2,025,000 (of which £1,169,000 has been paid by way of interim payments);

ii. index linked annual payments of £25,000 reflecting future annual net earnings to death or the age of 65 whichever is the earlier;

iii. index linked annual payments in respect of care at £100,000 to age 60 and £122,500 thereafter for life.

14. The Claimant has prepared a table setting out the base rate referred to in paragraph 5 in the Judge's order over the period referred to in that order, namely 23 November 2007 to 3 April 2009. He arrives at an applicable rate of 12.3459%. That element of the calculation has also been agreed.
15. According to the Defendant, out of the lump sum payment of £2,025,000 approximately £650,000 reflects past losses and damages for pain and suffering and loss of amenity and the balance of about £1.375 million represents capitalised future losses. However, that breakdown is not part of the agreement. The agreement is simply for the three separate figures identified.
16. A question has therefore arisen as to how paragraph 5 of the order of the Judge is to be applied in respect of that proposed settlement. I have been told that the settlement is in any event agreed. Whatever meaning I may give to the Judge's order, the parties consider themselves bound by the terms of the agreement summarised above.
17. Counsel advance four possible interpretations to be put upon the order of the Judge.

i) The Claimant contends that 33% of all the damages which it is agreed are to be awarded are to bear interest at the agreed rate of 12.3459%, but he advances two alternatives he refers to as Method A and

ii) Method B.

The Defendant also has two alternative positions.

iii) The first is that only those heads of damages on which the court ordinarily has the power to award interest shall be subject to the enhancement.

iv) The second is that the enhancement shall apply only to those heads of damages which the Claimant has been kept out of by the Defendants delay in accepting the Claimant's offer, in other words the lump sum element.

18. There are difficulties with all these interpretations. A considerable sum of money depends on the outcome of this issue as to the interpretation of the Judge's order. In order of magnitude, the possible outcomes are: (interpretation (i)) under the Claimant's Method A £208,986; (interpretation (ii)) under the Claimants Method B, £82,501.41 plus a figure to be added to the periodical payments; (interpretation (iv)) under the Defendant's second alternative submission £82,501.41; and (interpretation (iii)) under the Defendant's first alternative submission £26,750.

INTERPRETATION (i)

19. The Claimant contends that the appropriate way to approach the matter is to capitalise the periodical payments by reference to the life expectation and multipliers relied upon by the Defendant in the course of the proceedings. This is his Method A (interpretation (i)). Mr Hunter submits, and Mr Westcott recognises, that this method risks that the actual amount of interest paid will not relate directly to the total paid in damages prior to the Claimant's death.
20. For Method A, the calculation then proceeds by taking the multipliers said by the Defendant to be applicable to the calculation to the Claimant's losses. These were 25.86 (life) and 21.54 (earnings to age 65). The Defendant's life expectation was to age 70 according to this calculation. As to the periodical payments, there is the increment already referred to at age 60, and the earnings periodical payment stops at age 68. The Claimant proceeds by taking the multiplier for age 60-70 estimated by reference to Ogden tables 27 and 28 (ten years accelerated by 38 years) at 3.47 (8.86 x 0.3913), leaving 22.39 for the period to age 60. The periodical payments do not start until 4 January 2011 so about 0.98 should be deducted from this figure.
21. This calculation under Method A produces, in accordance with the above figures, a capital valuation of the damages at £5,129,575. Applying the interest rate of 12.3459 % on 33% of that sum produces the figure of £208,986. Under Method A the Claimant therefore submits that the effect of paragraph 5 of the Judges order is that that sum of £208,986 is payable now, in addition to the other figures which have been agreed.

INTERPRETATIONS (ii) and (iv)

22. Under the Claimant's Method B (interpretation (ii)) it is only the lump sum element of the settlement which gives rise to an immediate payment of interest under paragraph 5 of the Judge's order. That is calculated as applying 12.3459 % of 33% of £2,025,000, to produce £82,501.41. That is also the figure that would be awarded if I were to accept the second of the alternative submissions put forward by the Defendant (interpretation (iv)). In addition, under the Claimant's Method B, it will be necessary to adjust the periodical payments according to the same formula. There is no figure given for the value of these payments, because they are subject to adjustment.

INTERPRETATION (iii)

23. The first alternative submission of the Defendant (interpretation (iii)) produces a considerably lower figure. He takes the starting point as £650,000 as the presumed element of the award for past loss and pain and suffering and loss of amenity. Interest on 33% of this at the agreed rate of 12.345% produces the figure of £26,750.

SUBMISSIONS

24. For the Claimant Mr Westcott submits that paragraph 5 of the Judge's order is clear and unambiguous: "damages" means all the damages, and it is just a matter of choosing between Method A and Method B. If the Defendant had wished to limit or qualify the meaning of the word "damages" in that part of the Judge's order, then he should have made submissions to the Judge accordingly (which he did not) or raise the matter on appeal.
25. For the Defendant Mr Hunter submits that the order must be interpreted in the light of the law and of the context. He submits the words "interest" and "damages" take their meaning from their context. He accepts that this is an exercise in interpretation or construction, and that I am not to entertain arguments that would be appropriate only on appeal.
26. Mr Hunter starts from the guidance given on CPR Part 36 in two cases both now very well known, namely Petrotrade Inc v.Texaco Ltd [2000] EWCA Civ 512; [2002] 1 WLR 947 and McPhileny v. Times Newspapers Ltd (No 2) [2001] EWCA Civ 933; [2002] 1 WLR 934. He also cites the recent decision of MacDuff J in Pankhurst v White [2010] EWHC 311 (QB).
27. In Petrotrade the Court was considering what was then CPR 36.21, which is in terms similar to the current 36.14. Lord Woolf MR said:

"63. The ability of the court to award costs on an indemnity basis and interest at an enhanced rate should not be regarded as penal because orders for costs, even when made on an indemnity basis, never actually compensate a claimant for having to come to court to bring proceedings. The very process of being involved in court proceedings inevitably has an impact on a claimant, whether he is a private individual or a multi-national corporation. A claimant would be better off had he not become involved in court proceedings. Part of the culture of the CPR is to encourage parties to avoid proceedings unless it is unreasonable for them to do otherwise. In the case of an individual proceedings necessarily involve inconvenience and frequently involve anxiety and distress. These are not taken into account when assessing costs on the normal basis. In the case of a corporation, corporation senior officials and other staff inevitably will be diverted from their normal duties as a consequence of the proceedings. The disruption this causes to a corporation is not recoverable under an order for costs.

64. The power to order indemnity costs or higher rate interest is a means of achieving a fairer result for a claimant. If a defendant involves a claimant in proceedings after an offer has been made, and in the event, the result is no more favourable to the defendant than that which would have been achieved if the claimant's offer had been accepted without the need for those proceedings, the message of Part 36.21 is that, prima facie, it is just to makes an indemnity order for costs and for interest at an enhanced rate to be awarded. However, the indemnity order need not be for the entire proceedings nor, as I have already indicated, need the award of interest be for a particular period or at a particular rate. It must not however exceed the figure of 10 per cent referred to in Part 36.

65. There are circumstances where a just result is no order for costs or no interest even where the award exceeds an offer made by a claimant. Part 36.21 does no more than indicate the order which is to be made by the court unless it considers it is unjust to make that order. The general message of Part 36.21, when it applies, is that the court will usually order a higher rate of interest than the going rate".

28. In McPhilemy Chadwick LJ cited these paragraphs and added:

"19. … The powers conferred by the rule – to order indemnity costs or a higher rate of interest – are intended to provide "a means of achieving a fairer result for a claimant" (see paragraph 64 in Lord Woolf's judgment, to which I have already referred). Exercise of the powers cannot achieve "a fairer result" if it leads to the claimant receiving more than can properly be regarded as a full and complete recompense for having to resort to, to pursue and to endure the strain and anxiety of, legal proceedings. An exercise of the powers which led to the claimant receiving more than could properly be regarded as compensation, in that enlarged sense, would, necessarily in my view, be penal in nature. It could only be supported on the basis that there was a need to punish the defendant by requiring him to pay an amount which went beyond any amount needed to compensate the claimant. But, subject to the limitation that the powers are intended to be used in order to achieve a fairer result for the claimant and not to punish the defendant, it is plain that they are to be used in order to redress elements, otherwise inherent in the legal process, which can properly be regarded as unfair.

20. Two of those elements, which many would regard as obviously unfair, were identified by Lord Woolf, Master of the Rolls, in the Petrotrade case. First, an award of costs on the standard basis will, almost invariably, lead to the successful claimant recovering less than the costs which he has to pay to his solicitor. So, although he has been successful, he is out of pocket. Costs on an indemnity basis should avoid that element of unfairness. Second, neither costs on an indemnity basis nor interest awarded under section 35A of the Supreme Court Act 1981 will compensate the successful claimant for the inconvenience, anxiety and distress of proceedings or (where the claimant is a corporation) the disruption caused by the diversion of senior management from their normal duties. Interest at an enhanced rate – that is to say at a rate which is higher than the rate which would otherwise be ordered, under section 35A of the 1981 Act – may redress that element of unfairness. It is pertinent to note that paragraph (6) of CPR 36.21 expressly recognises that the court may make an order for the payment of interest under paragraph (2) notwithstanding that it also orders the payment of interest on the same sum and for the same period under some other power – of which the power under section 35A of the 1981 Act is an obvious example. Paragraph (6) imposes an overall limit of 10% above base rate.

21. I conclude, therefore, that the power to award interest under paragraph (2) of CPR 36.21 at an enhanced rate – that is to say, at a rate higher than the rate (if any) which would otherwise be chosen under section 35A of the 1981 Act – is conferred in order to enable the court, in a case to which CPR 36.21 applies, to redress the element of perceived unfairness, otherwise inherent in the legal process, which arises from the fact that damages, costs (even costs on an indemnity basis) and statutory interest will not compensate the successful claimant for the inconvenience, anxiety and distress of having to resort to and pursue proceedings which he had sought to avoid by an offer to settle on terms which (as events turned out) were less advantageous to him than the judgment which he achieved. But, if that is the purpose for which the power has been conferred, then it should not be used to award interest in a case where it must be assumed that the anxiety, inconvenience and distress of defamation proceedings have already been taken into account by the jury in reaching their award. To order the payment of interest on the amount of the award – in respect of any period prior to the date of the award – would be to risk introducing an element of double compensation. It would be to risk crossing the boundary which separates compensation from punishment".

29. Simon Brown LJ said at para 28:

"[The rule] is not designed to punish unreasonable conduct but rather as an incentive to encourage claimants to make, and defendants to accept, appropriate offers of settlement. That incentive plainly cannot work unless the non-acceptance of what ultimately proves to have been a sufficient offer ordinarily advantages the claimant in the respects set out in the rule. Given that in a defamation action it would generally be unjust to award interest on the damages, let alone at an enhanced rate, it becomes even more important that a Part 36.21 order is made as to costs, irrespective of whether or not the claimant is represented under a conditional fee arrangement. Otherwise the rule will simply become ineffective in this area of litigation, an area where to my mind it should play a prominent part".

30. Mr Hunter cites Pankhurst in support of his submission that an enhancement of a sum payable in the future would not be interest which ought to be awarded under CPR 36.14. Pankhurst had not, of course, been decided when the Judge made his order. In that case MacDuff J said at para 58:

"The part of the award. Upon which part or parts of the award should the enhanced interest be granted? Although the rule provides that the court may order interest to be paid at an enhanced rate upon "a whole or part of any sum of money awarded" I have reached the conclusion that it would be wrong to make any award of interest, enhanced or otherwise, in respect of those damages which were awarded for future losses and future expenditure, that is to say those damages which would not attract interest in the normal way. There is some authority to support this conclusion. In Petrotrade itself, Lord Woolf envisaged that, where the court would otherwise award interest, it could, where these provisions applied, order the interest to be paid at "more than the going rate." Upon damages for future losses, where interest is not awarded, there can be no "going rate". In a case (for example) of breach of contract, where the damages all represent past loss, it would be normal to award interest on the full amount of the award. If part 36.21 (now part 36.14) applied, it might be appropriate to award that interest at higher than the "going rate" on the whole of the award. But not where interest would not normally be awarded at all. This was the view of the Court of Appeal in respect of libel damages in McPhilemy v Times Newspapers [2001] EWCA Civ 933. "Given that, in a defamation action, it would generally be unjust to award interest upon the damages, let alone at an enhanced rate, it becomes more important that a part 36.21 order is made as to costs….." (my emphasis); per Lord Justice Simon Brown, as he then was, at paragraph 28. This was also expressed by Eady J in Jones v Associated Newspapers [2007] EWCA 1489 (QB). Where interest would not normally be awarded upon damages, it would be inappropriate to award enhanced (or any interest) upon those damages under the old part 36.21 (now 36.14). Accordingly, I have decided that it would be appropriate to award enhanced interest upon past losses only, and not upon future losses".

31. There are two different points to be distinguished in relation to damages which are awarded for future losses and future expenditure. Such damages may either be awarded in the form of a lump sum payable at the time of judgment or settlement, or they may be awarded by way of periodical payments to made in the future. The question whether interest can properly be applied to damages which are awarded for future losses and future expenditure can have a different answer, depending upon whether payment in respect of those damages is to be in a lump sum or in periodical payments.
32. Mr Westcott submits that MacDuff J was in error, and he referred to a number of cases in which other judges have awarded interest on future losses and expenditure. He did not have all of these cases to hand at the hearing, because he had had insufficient warning of the point to be raised by Mr Hunter.
33. In my judgment I do not have to decide this point if and in so far as it relates to that part of the Claimant's future losses or expenses as are included in the lump sum payment agreed in this case. The reason for this is that if the effect of the Judge's order is that he has in fact done that, then there is nothing I could do about it if I thought that he had been in error. That would be a matter for the Court of Appeal.
34. As a matter of record, Mr Westcott subsequently provided the other cases he had referred to in argument, together with a note of his submissions upon them, and Mr Hunter responded. The cases are: Peackock v Wincanton (unreported 23 October 2008, HHJ Jonathan Foster QC), Earl v Cantor Fitzgerald (unreported 16 May 2000 Moore-Bick J), Humpheryes v Nedcon UK Ltd [2004] EWHC 1260 (QB) and [2004] EWHC 2558 (QB) Roderick Evans J, and Smith v LC Windows Fashions Ltd (there is only the Order of Cranston J, without reasons). Mr Westcott submitted that in each of these cases a lump sum award which included an element for future losses and expenses, and in each of them an award of enhanced interest was made under CPR 36.14(3) (or its predecessor rule 36.21(2)).
35. Mr Hunter responds that in none of these was the court apparently addressed on the point of principle, whether interest should be ordered on the sum payable in respect of the future losses or expenses. It is only HHJ Foster QC who refers to McPhilemy. He did give careful consideration to that case, with a view to ensuring that the sum he awarded by way of interest should not be penal. But he was not asked to consider the point of principle.
36. None of the cases cited by Mr Westcott involved an order made for periodical payments.
37. If I did have to decide the point, I would respectfully be inclined to agree with MacDuff J and consider that it would be wrong to make any award of interest, enhanced or otherwise, in respect of those damages which were awarded for future losses and future expenditure, that is to say those damages which would not attract interest in the normal way.
38. Mr Westcott submits that McPhilemy is not directly in point. It was a libel action, and libel actions are unusual in that the damages awarded include compensation to the successful claimant for the inconvenience, anxiety and distress of having to resort to and pursue proceedings. It was for that reason that a further enhancement would involve double compensation. And the court did not discuss in that case any compensation for loss which would be suffered in the future. There is force in these points
39. However, Mr Hunter can rely on the general passages in McPhilemy as to the legislative purpose of CPR 36 to make a comparison between the sums which the Claimant claims to be entitled to under the Judge's order, and the general damages which according the JSB Guidelines can be awarded for a person such as the Claimant who has been rendered tetraplegic in the accident. The guideline award is £200,000 to £260,000. Compared with that figure for general damages, he submits that the enhancement of the damages claimed by the Claimant at £208,986 (interpretation (i)) is disproportionate. This is not compensation for the distress caused by failure to accept an offer settlement, but a penalty. That must also be the case if the figure for the enhancement is added to the future periodical payments.
40. There is support for Mr Hunter's submission in another passage in McPhilemy. Mr Hunter submits that where a contingent future loss is met by way of future contingent annual payments, it cannot be said that the claimant has been kept out of money to which he was otherwise entitled. The word "interest" is commonly used to mean what, at para 17, Chadwick LJ referred to as a sum:

"which reflects the loss to the claimant equivalent to the actual or notional cost of being kept out of the monetary compensation".

41. An enhancement of a sum payable in the future, and the payment of which is not delayed, is not normally be referred to as interest. Such an enhancement would rather be referred to as an uplift, or by some other such term.
42. Mr Hunter goes on to submit that the Judge must be assumed to have been aware of the consequences in money terms of the order he was making, and so that he cannot by the word "damages" have meant to include that part of the damages which represented future loss.
43. It is implicit in what Mr Hunter submits that the Judge must also have contemplated that the parties, if they settled the action, would do what a judge would do in a judgment, namely break down the sum between past losses and future losses. If he did contemplate that, then the parties overlooked the need to do that when they negotiated the settlement.
44. Mr Westcott submits that a reading of para 13 of the Judge's judgment shows that he did not contemplate, and was not asked to contemplate, the consequences in monetary terms of the order he was making. Nor does he appear to have contemplated a distinction to be drawn between future losses and past losses. The Judge said: "whatever figure is achieved as a result of further settlement or an award of the court, it will be possible to fix an interest payment on it".

DISCUSSION

45. I accept Mr Hunter's submission that the figure of £208,986 would be disproportionate and a penalty if that is the effect of the Judge's order. I accept Mr Westcott's submission that that the Judge did not contemplate, and was not asked to contemplate, the consequences in monetary terms of the order he was making. But, as I read the judgment, neither was the Judge was contemplating an award consisting in part of periodical payments.
46. Since the parties have not agreed a figure that represents future loss, I cannot adopt Mr Hunter's proposed figure of £650,000 referred to in para 15 above. It may be part of a figure that has been "determined to be payable" (in the words used in para 5 of the Judge's order), but it is not itself such a figure. And I cannot require the parties to reach an agreement that they have not reached.
47. That eliminates interpretation (iii), the first alternative contended for by the Defendant.
48. I also dismiss interpretation (i), that is the Claimant's Method A, for the same reason as I dismiss interpretation (iii), the capitalised value of the total of all the figures agreed between the parties is a calculation of the Claimant's. The order refers to "damages ultimately determined to be payable" and the judgment refers to a "figure … achieved as a result of further settlement". The capital figure used in Method A is neither of these.
49. The two solutions that remain are the Claimant's Method B, and the Defendant's second alternative, that is to say, interpretations (ii) and (iv) above.
50. The Claimant's Method B is based on figures which have been determined, namely the periodical payments. But they have been determined by a formula. The actual figures to be paid will be ascertainable in the future, at the dates on which they fall to be paid. They are not ascertainable now. However, I accept that it would be possible to treat them as "determined to be payable". The agreed figure of 12.3459% could be added to each payment when it falls to be made in the future. But it cannot be said that the Claimant has been or will have been kept out of this element of the monetary compensation.
51. The lump sum award is also a figure "determined to be payable". It includes a figure that represents future loss (albeit not a figure that has been ascertained). So on the Defendant's argument, it would be contrary to principle for it to carry interest (a point to be taken if at all in the Court of Appeal). Nevertheless, it can be said that the Claimant has been kept out of this element of the monetary compensation.
52. In my judgment, the word "interest" in the para 5 of the Judge's order is to be interpreted in its usual sense, namely as a sum which reflects the loss to the claimant equivalent to the actual or notional cost of being kept out of the monetary compensation. So it is not something to be applied to a payment to be made in the future, when payment of that sum will not have been delayed.
53. It would be unjust to award any interest on payments to be made in the future, when receipt of those payments will not have been delayed, and it would be all the more unjust to award enhanced interest on such payments. If it is possible to do so, I prefer to adopt a meaning for the Judge's order which is not penal. This consideration also points to the rejection of Method B.
54. For both these reasons, I reject Method B (interpretation (ii)).
55. What is referred to in the Judge's order and his judgment seems to me to be the lump sum payment. I adopt interpretation (iv).

CONCLUSION

56. Accordingly, in my judgment the true interpretation of para 5 of the Judge's order in the events that have occurred is that enhanced interest at the rate of 5% for the period 23 November 2007 to 3 April 2009 is to be applied to the lump sum element of the settlement only, namely to £2,025,000.